An innovation agenda

A regular reader of this blog asked me to comment on the new Conference Board report assessing Canada’s innovation track record.  The Board gives Canada a D and ranks us 14th out of 17 countries.

The Conference Board used 12 indicators to measure innovation performance. From the summary:

The indicator choice was guided by the Conference Board’s definition of innovation as “a process through which economic or social value is extracted from knowledge—through the creation, diffusion, and transformation of knowledge to produce new or significantly improved products or processes that are put to use by society.”

Knowledge production is captured by indicators measuring the number of scientific articles, patents (patents by population and share of world patents), and trademarks.

The transformation of knowledge is gauged by indicators examining technology exchange (the technology share of total exports and imports), the share of gross domestic product produced by high- and medium-high-technology manufacturing, and the share of GDP produced by knowledge-intensive services.

Market shares of selected knowledge-based sectors (aerospace, electronics, office machinery and computers, pharmaceuticals, and instruments) examine, for example, the share of Canada’s aerospace exports in total 17-country aerospace exports relative to the share of Canada’s total economy exports in total 17-country exports.

The trademarks per million population is a new indicator this year. This is a useful indicator of innovation because it allows us to benchmark services sector innovations and non-technological innovations not captured by data on patents.

I’ll just make a couple of quick points:

For the most part I agree with the Conference Board – an innovation agenda is both public and private investment in R&D but also broader public policy to encourage innovation. 

But to the chagrin of some, I don’t agree with the CBoC when they state this:

Innovation policies promote “creative destruction” of the old and hasten the transition to the new. Many of Canada’s industry sector policies are designed to preserve existing industrial production—such as forestry’s pulp and paper sector and auto assembly manufacturing—rather than generate new, highly innovative ones. In effect, these policies are short-term job protection policies that consume important resources that could be used to support long-term innovation. As a result, they work at cross purposes to innovation. Rather than shoring up fading oldsters, long-term innovation policies would help transform existing industries into new ones—such as turning the forestry industry into a bio-chemical sector—and would create new-to-world industries.

I have never understood the Toronto-centric fascination with this topic.  Why can’t forestry, auto manufacturing, etc. be innovative?  The implication of the CBoC and many think tanks is that innovative industries must be biotechnology or IT.  I would suggest an innovation agenda should pivot off our traditional sectors rather than the oft recommended abandonment. 

I think we all agree that bailing out failing business models is a bad idea – in any sector including biotechnology and IT but the forestry industry will always be needed in North America as long as we build homes, read anything in traditional print, heat our homes, etc.  The public policy agenda should be about encouraging world class innovation in traditional industries not their elimination.

I think the CBoC would be wise to make a similar distinction because sometimes policy makers are literal thinkers.

Another point made to me was that the countries that rank high on the innovation scale have a long term commitment to innovation. As my colleague pointed out “Countries that made overall improvements since the 80s, none went from a “D” or “C” rating to an “A” rating in under a decade”.   I have said before that we should avoid the marketing gimmicks “worst to first” etc. and set up the foundation that will have long term impacts.  I am completely in favour of short term milestones – we need to be moving the ball down the field but in the business of transformation – things do take time.

Where does New Brunswick fit into this?

There are a few points.  This should be a nationally driven thing.  Many of the indicators are driven by federal policy but a national innovation agenda does risk putting provinces like New Brunswick at a disadvantage.

Example:  When I asked a colleague of mine one time while something like 90% of the federal dollars from the sustainable technologies fund went to Greater Toronto area companies I was told “that is where they are located”.  When I asked why New Brunswick companies only got $700k out of the $5 billion Technology Partnerships Canada fund (at the time) I was told there were not any good applications from New Brunswick.  Same thing for federal R&D.  When I asked why New Brunswick gets virtually no federal health research dollars, I was told there is no capacity here to receive it (i.e. the best researchers and infrastructure are not here). 

My point is that an innovation agenda, from the vantage point of New Brunswick, needs to be about seeding innovation as much as nurturing it.

Gotta go to a meeting – ran out of time.  Hope that last point sticks.

13 thoughts on “An innovation agenda

  1. I wonder if there has been enough debate on the approach of R&D and how it’s funded. It’s seems there are conflicting messages out there regarding the use of public funds for private scientific research. In 2003, the Organisation for Economic Co-operation and Development [OECD] published The Sources of Economic Growth in OECD Countries, reporting on a comprehensive regression analysis of the factors that might explain the different growth rates of the world’s 21 leading economies between 1971 and 1998. The report indicated that only privately funded R&D led to economic growth, and that publicly funded R&D did not. Furthermore, the public funding of R&D supposedly crowded out private funding according to the OECD report, and thus slowed economic growth. I think it’s important to note that the leaders in this recent report by the CBoC all employ significant amounts of funding towards R&D related initiatives.

    A poll done by the Pew Research Center for the People and the Press found that a majority of Americans were huge believers in the efficacy of government-funded research:

    For its part, the general public endorses the idea that government outlays for research are necessary for scientific progress. Six-in-ten (60%) say “government investment in research is essential for scientific progress”; only about half as many (29%) say “private investment will ensure that enough scientific progress is made even without government investment.”

    As is often the case with opinions about the role of government, there is a substantial partisan divide in views of government investment in scientific research. Fewer than half of conservative Republicans (44%) say that government investment in research is essential for scientific progress; 48% of conservative Republicans say private investment will ensure that scientific progress is made. By comparison, 56% of moderate and liberal Republicans, 59% of independents and a much larger majority of Democrats (71%) say that government investment in research is essential.

  2. “Why can’t forestry, auto manufacturing, etc. be innovative?”

    The Toronto definition of innovation includes ‘must employ lots and lots of pony-tailed, ear-ring’d, men-in-suits’. We have a few of those in Freddy Beach but not enough to attract the fed R&D dollars, I guess.

  3. Uh, IF forestry and auto manufacturing were that innovative, then they would have added to the number of national and international patents, which means they would have moved Canada further up the list. They didn’t, which shows they are NOT that innovative.

    Recent history shows that they are not innovative because governments continuously bail them out. They haven’t HAD to be. I said this before, unions and working groups said DECADES before that mills had to stop churning out kraft paper. Heck, my DAD was telling me this in 1992. But why would they? They waited til Bernard Lord came along and gave them bailout money and ‘technology funding’ that would ‘let them remain competitive’. Gee, heaven forbid a COMPANY actually invest in itself to be competitive!

    We still haven’t gotten the data on this. We KNOW who gets funding, we DON”T know who gets rejected. Are they right that there is simply no place to invest? Or do they just not like the investments?

    However, if your argument is that the feds should be STARTING research companies in NB to ‘make it fair’, well, all I can say is good luck with that. Like I said, the Perimeter Institute is mainly university profs, they got free land from the municipality, they got some seed money to build by the region, some other money from the province, some guarantees from the feds, but the rest of the money came from good old Lazaridis, the local think tank developer. He’s got the money to do it, so again, we can ask just what the wealthiest NBers have done for NB research. And again, the northern cancer research centre in Sudbury began as a grassroots organization to get more research in the area, so if nobody is STARTING these things, then don’t blame Ottawa-look in a mirror.

  4. That’s a good link, but I think it proves the opposite of what is intended. Take a look at those research networks. In Manitoba it is medical research, in Toronto its photovoltaics, in Quebec its plastics and ‘value chain optimization’, in BC biomaterials and chemicals and machining, in Alberta its fibre optics.

    In New Brunswick its wood fibres and aquaculture.

    THAT is the problem, in fact I’m pretty sure that David has made this as a complaint before. Research elsewhere in Canada, although bad, is at least in new areas of technology. So like the highway funding issue we should be asking whether money is going to get spent to continuously fund Irving and some fish farms, or develop into something new. If David is here defending these types of investments because ‘they DO have innovation’ and provide jobs, then this blog has me THOROUGHLY confused.

    Keep in mind that forestry research DOES go on in BC, and fish studies certainly go on in ontario, I’ll wager there are more fish scientists here at the University of Waterloo than in all of New Brunswick. The question is what OTHER research networks are in New Brunswick, and if these are it, then we’ve basically answered the initial question.

    I know there is some kind of ‘river institute’ at UNB now, but they basically just do biology. Unfortunately, an underreported story is that NSERC now gives funding based on market considerations. If you can’t market it, they won’t fund it. It’s also worth pointing out that the tories have cut research funding considerably. This is NOT an area to brag about in Canada.

  5. “The report indicated that only privately funded R&D led to economic growth, and that publicly funded R&D did not.”

    Your statement distorts somewhat the actual conclusions in the OECD report, which are:

    “the analysis could find no clear-cut relationship between public R&D activities and growth, at least in the short term. The significance of this latter result should not however be overplayed as there are important interactions between public and private R&D activities as well as difficult-to-measure benefits from public R&D (e.g. defence, energy, health and university research) from the generation of basic knowledge that provides technology spillovers in the long run.”

    Impacts of Govt/uni R&D will more likely be long-term, as they tend to do work that has a longer time-horizon; often (esp here in Canda) that is work private R&D will not do. In the US for example govt research on space exploration produced many technical innovations that made their way into the marketplace as non-space applications.

  6. “If David is here defending these types of investments because ‘they DO have innovation’ and provide jobs, then this blog has me THOROUGHLY confused.”

    Well, that isn’t what David said. The forest is a resource; historically we have exploited that resource to produce relatively low-end jobs and low-innovation industries. But there is no reason why R&D cannot result in high-end innovative products that have non-traditional uses and applications. Why not take full advantage of the resource? Besides, nothing prevents R&D efforts in forest resources AND ICT, for example.

    UNB and the federal forestry centre do have some non-traditional R&D forest projects; these should be getting more support from all levels of govt and the private sector.

  7. Well, thats YOUR argument, not David’s. David has often criticized highway construction spending instead of spending in other areas. Richards argument is that “you can spend money in BOTH”. That is true, but money is not limitless and this is a question of priorities. We see what kind of ‘centres of excellence’ that these other schools offer, and we see what is offered in NB. Fibreboard IS getting money, but just because its ‘non traditional’ means nothing about industry priorities. In NB the centres of excellence are in different ways to use pulp and fish. In other provinces it is new industries that have little to do with resources at all. If you WANT all the R&D money that goes into the province to be on resources that have been dying for decades that’s your business, it just seems somewhat illogical to be griping about being reliant and pigeonholed as hewers of wood and the arguing that the R&D money SHOULD be going to those fields while everybody else is moving on to knowledge based industries.

  8. “If David is here defending these types of investments because ‘they DO have innovation’ and provide jobs, then this blog has me THOROUGHLY confused. ”

    That was your quote and it is obvious to anyone who reads the post that you are not correct. Why not just admit you misread his post and stop moving the goalposts?

    “the R&D money that goes into the province to be on resources that have been dying ”

    The resource is not dying; some of the industries that have traditional uses for that resource are disappearing. Big difference, and the reason for the need for R&D on non-traditional uses. Your hate for irving is blinding you to possibilities.

    “knowledge based industries”

    R&D on non-traditional uses (e.g biochem discovery and extraction) and the high-end products that result are foundations for knowledge-based industries. That’s the whole point – to turn low-end jobs into high-end jobs.

  9. Dude, relax, but you are entertaining. First off, you’ll notice the word “if”. Second, its up to DAVID to state the rest is wrong, not YOU. I’ve been reading this blog pretty much every day almost since the month it started, you’ve been here a few months, so don’t lecture on things you don’t know about.

    But actually, even within those months I can guarantee that there’s at least one or two blogs where David has berated highway spending at the detriment of more useful investments.

    This has nothing to do with Irving. Irving was a main participant in the Fundy Model Forest-while it still went on. Irving has a FAR better track record on research than Fraser or the other lease holders. It’s not GOOD, but its at least better.

    If you think that “research in this area will develop technologies based upon the cost effective harvesting of biomass” is the ‘wave of the future’ and will lead to tons of new jobs, well, believe it if you want.

    David has often invoked the ‘either or’ argument for investment. If you are perfectly happy with the way those research dollars are spent, I don’t really care. In fact, we can use that same analogy-since you say there is lots of life in forestry and fish, then I guess we don’t need to hear any more complaints about how ontario has all the auto plants. Since there is the potential for lots of new jobs in the woods and waters, well, then I guess we know where YOUR priorities are.

  10. ” month it started, you’ve been here a few months, so don’t lecture on things you don’t know about.”

    More misdirection and goal-post moving. Readers can see for themselves that you are wrong on the facts. All they have to do is start with David’s post and read down. You can’t hide that.

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